Hedge Funds Resume Pre-War Playbook as U.S.-Iran Peace Deal Approaches

According to Bloomberg, on June 15, global hedge funds have repositioned portfolios ahead of the anticipated U.S.-Iran peace agreement signing on Friday (June 19), shifting capital into short-duration U.S. Treasuries, Asian currencies, and emerging market equities that were oversold during the conflict.

Market data reflected the sentiment shift: international oil prices fell, boosting global equities and bonds, while declining risk premiums weakened the U.S. dollar. Treasury yields declined across the curve—2-year yields fell 6 basis points to 4.02%, 10-year yields dropped 5 basis points to 4.43%—signaling reduced expectations for further Fed rate hikes. Fund managers stated the peace agreement resolves a major variable that has disrupted markets in recent months. Great Hill Capital's Thomas Hayes noted that investment logic is reverting to pre-conflict conditions from early 2026, with the fund now adding U.S. consumer stocks. Grey Value Management's Steven Grey flagged short-duration Treasuries as attractive given the current 40 basis point spread between 10-year and 2-year yields. Notably, Asian markets faced the deepest losses during the conflict—India and Indonesia's benchmark indices rank among 2026's worst performers—positioning them for significant recovery.